Good-bye “Pay as You Go”

Remember when, back in 2003, an energetic, youthful mayor-elect promised (Thanks to Paul over at Municipal Shadow):

“The City will continue with the 2002 ‘Pay as you go’ philosophy where eventually the majority of capital expenditures will be funded out of the current operations as opposed to debt or transfers from reserves, and stop the rampant debt growth. “

Well, in the last month since the election we have heard that the city will have to issue over $40 million in new debt, approximately $60 million in “bridge financing” (a.k.a debt, just window-dressed with another name) for the east-end arena. We have also learned that the city has been “borrowing” from the reserve funds to pay for capital expenditures which has resulted in the city having one of the lowest reserve funds in the province.

Then, Paul, over at W.E. Speak, noticed something peculiar on the city’s website – references to Zero Based Budgeting have disappeared.

Well no wonder! We are borrowing nearly 50% of total tax revenue [Note:  error, not total revenue, total revenue derived from property taxes] in this year alone, pushing our REAL debt (not the one some of our councilors and mayor like to talk about) to well over $250 million (now when you factor in future liabilities such as pensions, we’re talking a city debt approaching half a billion dollars) – can’t have zero based budgeting when “zero” starts at -$100 million.

So what happened to our Mayor’s 2003 promise? What exactly happend to CityStat – the crux of accountable and efficient city government? Remember the millions upon millions Baltimore and New York City saved with CityStat?

It is rather difficult to “Pay as You Go” when you have to borrow to do it, don’t you think?